Slides* at … tompeters *Also, “Long”

Tom Peters’

Re-Imagine!Leading Change,

Developing Talent, Driving Innovation,

Adding Value,Achieving Excellence

Associsation of Chief Executive OfficersAthens/09May2006

Slides* at …

tompeters.com

*Also, “Long”

Part #1: Introduction

EXCELLENCE.ALWAYS.

EXCELLENCE.

BASICS.

Hardball: Are You Playing to Play or Playing to Win? by George Stalk & Rob Lachenauer/HBS Press

“The winners in business have always played hardball.” “Unleash massive and overwhelming force.” “Exploit

anomalies.” “Threaten your competitor’s profit sanctuaries.” “Entice your competitor into retreat.”

Approximately 640 Index entries: Customer/s

(service, retention, loyalty), 4. People (employees, motivation, morale,

worker/s), 0. Innovation (product development, research &

development, new products), 0.

My (Les’s) Dinner with Henri

JUST WHAT IS IT YOU MAKE?

P.P.E.E.R.R.E.

People.Product.

Execution.Enthusiasm.Relentless.Re-invent.Excellence.

CRO*

*Chief Revenue Officer

EXCELLENCE. THE WORD.

Synonyms

PurityTranscendence

VirtueEleganceMajesty

Antonyms

Mediocrity

EXCELLENCE.

GAMECHANGER.

Excellence1982: The Bedrock “Eight Basics”

1. A Bias for Action2. Close to the Customer3. Autonomy and Entrepreneurship4. Productivity Through People5. Hands On, Value-Driven6. Stick to the Knitting7. Simple Form, Lean Staff8. Simultaneous Loose-Tight Properties”

What is In Search of Excellence all about:

People. Emotion. Engagement. Exuberance. Action-Execution. Empowerment. Independence. Initiative. Imagination. Great

Stories. Incredible Adventures. Trust. Caring. Fun. Joy.

Customer-centrism. Profit. Growth. “Brand You.” “Dramatic Differences.” Experiences that Make You “Gasp.” Excellence.

Always.

ExIn*: 1982-2002/Forbes.com

DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050

*Excellence Index /Basket of 32 publicly traded stocks

EXCELLENCE.

ALWAYS.

“Why in the world did you go to Siberia?”

The Peters Principles: Enthusiasm.

Emotion. Excellence. Energy. Excitement. Service. Growth.

Creativity. Imagination. Vitality. Joy. Surprise. Independence. Spirit. Community. Limitless human potential. Diversity. Profit. Innovation. Design.

Quality. Entrepreneurialism. Wow.

Business* ** (*at its best): An emotional, vital, innovative, joyful,

creative, entrepreneurial endeavor that elicits

maximum concerted human potential in the

wholehearted service of others.***

**Excellence. Always.***Employees, Customers, Suppliers, Communities, Owners, Temporary partners

Business: The Ultimate Creative

Endeavor.

Business: The Ultimate Personal

Development-Growth

Experience.

Business: The Ultimate

Transcendent Service

Opportunity.

Part #2: Principal Argument

Re-Imagine!Leading Change,

Developing Talent, Driving Innovation,

Adding Value,Achieving Excellence

Re-imagine! Not Your Father’s World I.

THREE BILLION NEW CAPITALISTS

—Clyde Prestowitz

Re-imagine!

Not Your Father’s World II.

“Income Confers No

Immunity as Jobs Migrate”

—Headline/USA Today/02.2004

“Deutsche Bank Moves Half of Its Back-office Jobs to

India”/ headline/FT/0327/500 of 900 Research/JPMorgan

Chase/30% back-office by 12.31.07

Re-imagine!

Not Your Father’s World III.

“A focus on cost-cutting and efficiency has helped many organizations weather the

downturn, but this approach will ultimately

render them obsolete. Only the constant pursuit of

innovation can ensure long-term

success.” —Daniel Muzyka, Dean, Sauder School of Business,

Univ of British Columbia (FT/09.17.04)

“Get better” versus

“Get different”

CRO*


The General’s Story. (And Darwin’s)

“If you don’t like change,

you’re going to like irrelevance even less.” —General Eric

Shinseki, Chief of Staff. U. S. Army

“It is not the strongest of the

species that survives, nor the most intelligent, but the one most

responsive to change.” —Charles Darwin

Everybody’s Story.

“One Singaporean worker costs as much as …

3 … in Malaysia 8 … in Thailand 13 … in China 18 … in India.”

Source: The Straits Times/2003

“One Singaporean worker costs as much as …

3 … in Malaysia

8 … in Thailand 13 … in China 18 … in India.”


“Thaksinomics” (after Thaksin Shinawatra, PM)/

“Bangkok Fashion City”:

“managed asset

reflation” (add to

brand value of Thai textiles by demonstrating flair and design excellence)


New ZealandThailand

SpainPortugalIreland

Singapore Taiwan

PhilippinesUAEChile

Better By Design: A National Strategy

NZ = Design

Excellence

1. Re-imagine Permanence: The Emperor

Has No Clothes!

“Forbes100” from 1917 to 1987: 39 members of the Class of ’17 were

alive in ’87; 18 in ’87 F100; 18 F100 “survivors” underperformed the

market by 20%; just 2 (2%), GE &

Kodak, outperformed the market 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97; 12 (2.4%) of 500 outperformed the market from

1957 to 1997.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The

answer seems obvious: Buy a very large one and just wait.”

—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

De-cent-ral-iz-a-tion!

Ex-e-cu-

tion!

Ac-count-a-bil-ity!

“GE has set a standard of candor.

… There is no puffery. … There isn’t an ounce of

denial in the place.” —

Kevin Sharer, CEO Amgen, on the “GE mystique” (Fortune)

6:15A.M.

2. Re-imagine:

Innovateor

Die!!

Resist!

“Not a single company that qualified as having made a sustained transformation ignited its leap with a big

acquisition or merger. Moreover, comparison companies—those that failed to make a leap or, if they did,

failed to sustain it—often tried to make themselves great with a big acquisition

or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy

your way to greatness.” —Jim Collins/Time/2004

Scale?

“I don’t believe in

economies of scale. You don’t get better by being bigger. You get worse.” —

Dick Kovacevich/Wells Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%;

J.P. Morgan Chase, 0.9%)

Scale?

“Microsoft’s Struggle With Scale”

—Headline, FT, 09.2005

“Troubling Exits at Microsoft” —Cover Story, BW, 09.2005

“Too Big to Move Fast?” —Headline, BW, 09.2005

Different!*

*“Dramatic Difference” (DH), “Remarkable Point of view” (SG)

“To grow, companies need to break out of a

vicious cycle of competitive

benchmarking and imitation.” —W. Chan Kim & Renée

Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times/2003

“Value innovation is about making the competition

irrelevant by creating uncontested market space. We argue that

beating the competition within the confines of the existing industry is

not the way to create profitable growth.”

—Chan Kim & Renée Mauborgne (INSEAD), from Blue Ocean Strategy (The Times/London)

Focus!

Focus: “All Strategy Is Local: True competitive advantages

are harder to find and maintain

than people realize. The odds are best in

tightly drawn markets, not big,

sprawling ones” —Title/

Bruce Greenwald & Judd Kahn/HBR09.05

“We will not, I repeat not,

pretend to be ‘all things to all people.’” —CEO, Investec (03.06)

Innovation’s Saviors-in-Waiting

Disgruntled CustomersOff-the-Scope Competitors

Rogue EmployeesFringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

We become who we spend

timewith!

Measure “Strangeness”/Portfolio Quality

StaffConsultants

VendorsOut-sourcing Partners (#, Quality)

Innovation Alliance PartnersCustomers

Competitors (who we “benchmark” against)

Strategic Initiatives Product Portfolio (LineEx v. Leap)

IS/IT ProjectsHQ LocationLunch Mates

LanguageBoard

“The Bottleneck

Is at the Top of the

Bottle”“Where are you likely to find people with the least diversity of

experience, the largest investment in the past, and the greatest reverence for industry dogma:

At the top!”

— Gary Hamel/Harvard Business Review

“Beware of the tyranny of making

Small Changes to Small

Things. Rather,

make Big Changes

to Big Things.”

—Roger Enrico, former Chairman, PepsiCo

Five MYTHS About Changing Behavior

*Crisis is a powerful impetus for change*Change is motivated by fear*The facts will set us free

*Small, gradual changes are always easier to make and sustain*We can’t change because our brains become “hardwired” early in life

Source: Fast Company/05.2005

“Reward excellent failures.

Punish mediocre

successes.”Phil Daniels, Sydney exec

Speed/

Tempo!

“We don’t sell

insurance anymore.

We sell speed.”

Peter Lewis, Progressive

Action

!

“Ninety percent of what we call

‘management’ consists of making

it difficult for people to get

things done.” – Peter Drucker

“Execution is a

systematic process of rigorously

discussing hows and whats, tenaciously following through, and

ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done

“Execution is the job of

the business leader.” —Larry Bossidy & Ram

Charan/ Execution: The Discipline of Getting Things Done

Measurable!

Innovation Index: How many of your Top 5 Strategic

Initiatives/Key Projects score 8 or higher (out of 10) on a

“Weird”/ “Profound”/ “Wow”/“Game- changer”

Scale?

Personal!

Step #1: Buy a Mirror!

“The First step in a ‘dramatic’

‘organizational change program’ is obvious—

dramatic personal change!” —RG

3. Re-imagine Organizing I:

IS/IT as Disruptive Tool!

We all live in

Dell-Wal*Mart-

eBay-Google World!

“the FedEx Economy”

—headline/New York Times/10.08.05

“Any3”: Anything/ Anywhere/ Anytime

Power Tools for Power Solutions/

Strategies! —TP

“Ebusiness is about rebuilding the

organization from the ground up. Most companies today

are not built to exploit the Internet. Their business processes, their approvals, their

hierarchies, the number of people they employ … all of that is wrong for running

an ebusiness.” —Ray Lane, Kleiner Perkins

5% F500 have CIO on Board: “While

some of the world’s most admired companies—

Tesco, Wal*Mart —are transforming the business landscape by including technology experts on their boards, the vast majority are

missing out on ways to boost productivity, competitiveness and shareholder value.”

Source: Burson-Marsteller

4. Re-imagine

Organizing II: The Age of

“Best-sourcing.”

“Organizations will still be critically important in the

world, but as ‘organizers,’ not

‘employers’!” — Charles Handy

Not “out sourcing”Not “off shoring”

Not “near shoring”Not “in sourcing”

but …

“Best Sourcing”

“global innovation networks”

vs

“research in large monolithic companies”

Source: George Colony/Forrester Research

5. Re-imagine Business’s

Fundamental Value Proposition: Fighting

“Inevitable Commoditization” via “The ‘Gamechanging

Solutions’ Imperative.”

Up, Up, Up,

Up

the Value-added Ladder.

And the “M” Stands for … ?

Gerstner’s IBM: “Systems Integrator of choice.”/BW (“Lou, help us turn ‘all this’ into that long-

promised ‘revolution.’ ” )

IBM Global Services* (*Integrated Systems

Services Corp.): $55B

And …

MasterCard Advisors

Huge: Customer Satisfaction versus Customer

Success

The Value-added Ladder/Stuff ‘n’ Things

Goods Raw Materials

The Value-added Ladder/Stuff & Transactions

ServicesGoods

Raw Materials

The Value-added Ladder/Opportunity-seeking

Gamechanging Solutions

ServicesGoods

Raw Materials

6. Re-imagine Organizing IV: The White-Collar Tsunami and the Professional Service Firm (“PSF”)

Imperative.

“ ‘Disintermediation’ is overrated. Those who fear disintermediation should in fact be afraid of

irrelevance—disintermediation is just another way

of saying that … you’ve become

irrelevant to your customers.”

—John Battelle/Point/Advertising Age/07.05

Answer: Professional Service Firm/PSF!

Department Head

to …

Managing

Partner, IS [HR, R&D, etc.] Inc.

Answer:

PSF

The “PSF35”: Thirty-Five

Professional Service Firm Marks of Excellence

The PSF35: The Work & The Legacy

1. CRYSTAL CLEAR POINT OF VIEW (Every Practice Group: “If you can’t explain your position in eight words or less, you don’t have a position”—Seth Godin)2. DRAMATIC DIFFERENCE (“We are the only ones who do what we do”—Jerry Garcia)3. Stretch Is Routine (“Never bite off less than you can chew”—anon.)4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World)6. Small “Uneconomic” Clients with Big Aims7. Life Is Too Short to Work with Jerks (Fire lousy clients)8. OBSESSED WITH LEGACY (Practice Group and Individual: “Dent the Universe”—Steve Jobs)9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a ‘commodity’ ”10. Consistent with #9 above … DO NOT SHY AWAY FROM THE WORD (IDEA) “RADICAL”

Point of View!

Point of Dramatic

Difference!

“Purchasing Officer” Thrust #1: Cost (at All Costs*) Minimization

Professional? Or/to: Full Partner-

Leader in Lifetime Value-added

Maximization?(*Lopez: “Arguably ‘Villain #1’ in GM tragedy”/AnonVSE-Spain)

7. Re-imagine Enterprise as

Theater I: A World of Scintillating “Experiences.”

“Experiences are as distinct

from services as services are from

goods.” —Joe Pine & Jim Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”

Source: Jean-Marie Dru, Disruption

“The [Starbucks] Fix” Is on …

“We have identified a

‘third place.’ And I

really believe that sets us apart. The third place is that place that’s not work or home. It’s the place our customers

come for refuge.”

Nancy Orsolini, District Manager

The Value-added Ladder/Memorable Connection

Spellbinding Experiences

Gamechanging SolutionsServicesGoods

Raw Materials

Beyond the “Transaction”/ “Satisfaction” Mentality

“Good hotel”/ “Happy guest”/ “Exceeded Expectations”

vs.

“Great Vacation”/ “Great Conference”/ “Operation Personal

Renewal”

CXO*

*Chief eXperience Officer

8. Re-imagine Enterprise as

Theater II: Embracing the “Dream

Business.”

DREAM: “A dream is a complete moment in the life

of a client. Important experiences that tempt the client to commit substantial resources. The essence of

the desires of the consumer. The opportunity to help

clients become what they want to be.”

—Gian Luigi Longinotti-Buitoni

The Value-added Ladder/Emotion

Dreams Come True

Spellbinding Experiences Gamechanging Solutions

ServicesGoods

Raw Materials

Furniture vs. Dreams

“We do not sell ‘furniture’ at

Domain. We sell dreams. This is

accomplished by addressing the half-formed needs in our

customers’ heads. By uncovering these needs, we, in essence, fill in the blanks. We

convert ‘needs’ into ‘dreams.’ Sales are the

inevitable result.” — Judy George,

Domain Home Fashions

IBM, MasterCard …

Dream Merchants

!

CDM*

*Chief Dream Merchant

9. Re-imagine the “Soul” of New Value: Design

Reigns!

Radio City Music HallSeptember 2005

Franchise Lost!

TP: “How many of you [600] really

crave a new Chevy?”

NYC/IIR/061205

All Equal Except …

“At Sony we assume that all products of our competitors have basically the same technology, price, performance

and features. Design is the only thing that

differentiates one product from another in the marketplace.” —

Norio Ohga

“We don’t have a good language to talk about this kind of thing. In

most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning

of design. Design is the fundamental soul

of a man-made creation.” —Steve Jobs

Hypothesis: “Design” is the principle

“metaphor” for the encompassing Value-

added Imperative!

CWO*

*Chief WOW Officer

Up, Up, Up,

Up

the Value-added Ladder.

CRO*


10. Re-imagine the Customer I: Trends Worth Trillion$$$ …

Women Roar.

“Women are the

majority market”

—Fara Warner/The Power of the Purse

The Perfect Answer

Jill and Jack buy slacks in black…

Read This Book …

EVEolution: The Eight

Truths of Marketing

to WomenFaith Popcorn & Lys Marigold

“Women don’t buy

brands. They join them.”

EVEolution

1. Men and women are different.2. Very different.3. VERY, VERY DIFFERENT.4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common.5. Women buy lotsa stuff.

6. WOMEN BUY A-L-L THE STUFF.7. Women’s Market = Opportunity No. 1.8. Men are (STILL) in charge.9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN.10. Women’s Market = Opportunity No. 1.

10. Women’s Market =

Opportunity No. 1.

Good Thinking, Guys!

“Kodak Sharpens Digital Focus

On Its Best Customers:

Women”

—Page 1 Headline/WSJ/0705

11. Re-imagine the Customer II: Trends

Worth Trillion$$$ …

Boomer Bonanza/

Godzilla Geezer.

2000-2010 Stats

18-44: -1%

55+: +21%(55-64: +47%)

44-65: “New Customer Majority” *

*45% larger than 18-43; 60% larger by 2010Source: Ageless Marketing, David Wolfe & Robert Snyder

“The New Customer Majority is the only adult

market with realistic prospects for significant

sales growth in dozens of product lines for thousands of companies.” —David Wolfe & Robert Snyder,

Ageless Marketing

12. Re-imagine Excellence I: The Talent Obsession.

Brand =

Talent.

“THE FUTURE BELONGS TO …

SMALL POPULATIONS … WHO BUILD EMPIRES OF THE MIND …

AND WHO IGNORE THE TEMPTATION OF—OR DO NOT HAVE THE OPTION OF—EXPLOITING NATURAL

RESOURCES.”

Source: Juan Enriquez/As the Future Catches You

PARC’s Bob Taylor:

“Connoisseur

of Talent”

Hire very good

people!

“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia-

Pacific changed 20 of his 40 box plant managers to put more talented, higher paid

managers in charge. He increased

profitability from $25 million to $80 million

in 2 years.” —Ed Michaels, War for Talent

DD$21M

A review of Jack and Suzy Welch’s Winning claims there are but two key differentiators that set GE “culture” apart from the herd:

First: Separating financial forecasting and performance measurement. Performance measurement based, as it usually is, on budgeting leads to an epidemic of gaming the system. GE’s performance measurement is divorced from budgeting—and instead reflects how you do relative to your past performance and relative to competitors’ performance; ie it’s about how you actually do in the context of what happened in the real world, not as compared to a gamed-abstract plan developed last year.

Second: Putting HR on a par with finance and marketing.

Our Mission

To develop and manage talent;

to apply that talent,throughout the world,

for the benefit of clients;to do so in partnership;

to do so with profit.WPP

13. Re-imagine Leadership for Totally

Screwed-Up Times: The

Passion Imperative.

Create a Cause!

“People want to be part of something larger

than themselves. They want to be part of

something they’re really proud of, that they’ll

fight for, sacrifice for , trust.” —Howard Schultz, Starbucks (IBD/09.05)

“Management has a lot to do with answers. Leadership is a function of questions. And the

first question for a leader always

is: ‘Who do we intend to be?’ Not ‘What are we going to do?’

but ‘Who do we intend to be?’” —Max De Pree, Herman Miller

Find ’em!

“The” Secret: Jack didn’t have a

“vision”!

Respect ’em!

Amen!

“What creates trust, in the end, is the leader’s manifest

respect for the followers.”

— Jim O’Toole, Leading Change

Make It a Grand

Adventure!

Organizing Genius / Warren Bennis and Patricia Ward Biederman

“Groups become great only when everyone in them, leaders and

members alike, is free to do his or her absolute best.”

“The best thing a leader can do for a

Great Group is to allow its members to discover their

greatness.”

Yes!!!!!!!!!!!!!!!!!

“free to do his or her absolute best” …

“allow its members to discover their

greatness.”

“The role of the Director is to create a

space where the actor or actress can become more than they’ve ever been before, more than

they’ve dreamed of being.” —Robert Altman, Oscar

acceptance

“We are a ‘life

success’ company”

Dave Liniger, RE/MAX

Trumpet an Exhilarating

Story!

Best Story Wins!

“A key – perhaps the key – to leadership is

the effective communication

of a story.”—Howard Gardner/Leading Minds:

An Anatomy of Leadership

Live Your

Story!

“You must

be the

change you wish to see in the

world.”Gandhi

MBWA**HS/25+

You = Your calendar*

*Calendars NEVER lie!!

Try It!

Sam’s Secret #1!

Insist on

Speed!

“We don’t sell

insurance anymore.

We sell speed.”

Peter Lewis, Progressive

Demand Action!

“We have a ‘strategic’ plan. It’s

called ‘doing

things.’” — Herb

Kelleher

Put Women

in Charge!

“AS LEADERS, WOMEN

RULE: New Studies find that

female managers outshine their male counterparts in almost every measure”

Title, Special Report/BusinessWeek

????????

6/44

“To be a leader in consumer

products, it’s critical to have

leaders who represent the population we

serve.” —Steve Reinemund/PepsiCo

Dispense Enthusiasm!

“Nothing is so contagious as enthusiasm.”

—Samuel Taylor Coleridge

“Most important,

he upped the energy level at Motorola.” —Fortune on Ed Zander/08.05

Avoid … Moderation!

The greatest dangerfor most of us

is not that our aim istoo high

and we miss it,but that it is

too lowand we reach it.

Michelangelo

Kevin Roberts’ Credo

1. Ready. Fire! Aim.2. If it ain’t broke ... Break it!3. Hire crazies.4. Ask dumb questions.5. Pursue failure.6. Lead, follow ... or get out of the way!7. Spread confusion.8. Ditch your office.9. Read odd stuff.

10. Avoid moderation!

Avoid … Moderation!

Insanely Great Language!

“Insanely Great.”

—Steve Jobs

Radically Thrilling Language!

“Radically Thrilling.”

—BMW Z4 (ad)

CTO**Chief Thrills Officer

Synonyms

PurityTranscendence

VirtueEleganceMajesty

Antonyms

Mediocrity

Free the Lunatic Within!

“You can’t behave in a calm, rational manner. You’ve got to be out there on

the lunatic fringe.” — Jack Welch

EXCELLENCE.

ALWAYS.

Slides* at … tompeters *Also, “Long”

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